Beijing Apple store egged after iPhone delay

By JOE MCDONALD -
Associated Press -
Friday, January 13, 2012

BEIJING (AP) - Angry customers and gangs of scalpers threw eggs at Apple Inc.’s flagship Beijing store Friday after its opening for the China launch of the iPhone 4S was canceled due to concerns over the size of the crowd.

Apple reacted to the outburst by postponing iPhone 4S sales in its mainland China stores to protect the safety of customers and employees. It said the phone still will be sold online and through its local carrier.

The incident highlighted Apple’s huge popularity in China and the role of middlemen who buy up limited supplies of iPhones and other products or smuggle them from abroad for resale to Chinese gadget fans at a big markup.

Hundreds of customers including migrant workers hired by scalpers in teams of 20 to 30 waited overnight in freezing weather at the Apple store in a shopping mall in Beijing’s east side Sanlitun district.

The crowd erupted after the store failed to open on schedule at 7 a.m. Some threw eggs and shouted at employees through the windows.

A person with a megaphone announced the sale was canceled. Police ordered the crowd to leave and sealed off the area with yellow tape. Employees posted a sign saying the iPhone 4S was out of stock.

“We were unable to open our store at Sanlitun due to the large crowd, and to ensure the safety of our customers and employees, iPhone will not be available in our retail stores in Beijing and Shanghai for the time being,” said Apple spokeswoman Carolyn Wu.

The iPhone 4S quickly sold out at other Apple stores in China, Wu said. She said the phone still will be sold in China through Apple’s online store, its local carrier China Unicom Ltd. and retailers that are authorized resellers.

Wu declined to comment on what Apple might know about scalpers buying iPhones for resale.

China is Apple’s fastest-growing market and “an area of enormous opportunity,” CEO Tim Cook said in October. He said quarterly sales were up nearly four times over a year earlier and accounted for one-sixth of Apple’s global sales.

Apple’s China stores are routinely mobbed for the release of new products.

The company has its own stores only in Beijing and Shanghai, with a handful of authorized retailers in other cities, so middlemen who buy iPhones and resell them in other areas can make big profits, said Wang Ying, who follows the mobile phone market for Analysys International, a research firm in Beijing.

“Apple is making a lot of money so it is not too concerned about the scalpers,” Wang said.

Wang and other industry analysts said the size of the underground trade and price markups are unclear.

In Shanghai, stores limited iPhone 4S sales on Friday to two per customer. Several hundred people were waiting when the stores opened, bundled up against the cold. Some passed the time playing mahjong.